Accenture on hiring spree in India

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Jobs and job protectionism

Though I can understand TMS's sentiments, IMHO, his post is a call for protectionism. Consider:
1. Free trade no longer encompasses just the movement of goods. In a knowledge based economy, even skills are valued and traded. Thus, if you believe in free trade, then protection of local jobs, though understandable, opens you to the charge of hypocrisy. You cannot selectively decide what goods are protected by free trade and what aren't.
2. I have been to India and know for a fact that Software engineers there earn the highest salaries in the country. Many of them earn even more than doctors do. However, in dollar terms, they earn about a fifth of what engineers here earn. Even so, $1000 in India has the buying power of roughly $4000 here since the cost of living is ridiculously cheap. For example, a taxicab fare from the airport to downtown area of Bombay costs about $13 (for a distance of 20-25 miles). Therefore, labor laws don't even come into the picture.
3. Labor laws though not upto American standards, are surprisingly good when you compare them to the rest of the third world. If we stop trading with every country that is not upto our standards, then we would have to slash more than 50% of our trade, and that's a conservative estimate.
4. Jobs like goods follow the laws of supply and demand, especially in today's global villages! Indian labor (or for that matter, Chinese labor) is cheaper now. So, the jobs go there. Who knows, 20 years from now, their salaries may rise to the extent that they are no longer competitive, and then maybe the jobs will go to some African country. But try as you might, you cannot stop that. protectionism only works in the short run.

Posted by: SamK   Posted on: 12/04/03 You are currently: a Guest | Members login | Terms of Use

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